Dividend in Family Firm

J Bus Ethics (2012) 110:97–112 DOI 10.1007/s10551-011-1150-0

Dividends Behavior in State- Versus Family-Controlled Firms: Evidence from Hong Kong

Tina T. He • Wilson X. B. Li • Gordon Y. N. Tang

Received: 10 February 2011 / Accepted: 13 December 2011 / Published online: 25 December 2011 Ó Springer Science+Business Media B.V. 2011

Abstract This study comparatively examines the dividends behavior in state-controlled firms versus familycontrolled firms. With the sample of large industrial firms listed on the Main Board of Hong Kong Stock Exchange, we investigate the dividends payment rates, stability of dividends payment, the effects of firm size, profitability and growth opportunity on likelihood to pay dividends, as well as the concentration of dividend in state-controlled versus family-controlled firms. Based on the findings, we derive some ethical implications of dividends policy regarding the differences in business ethical behavior, corporate social responsibility, corporate governance, business sustainability, and shareholder activism in state-controlled versus family-controlled firms, as well as the improvement in these respects through cross-listing in Hong Kong. Keywords Business ethical behavior Á Corporate governance Á Corporate social responsibility Á Dividend Á Family Á State Introduction Being publicly listed corporations with controlling shareholders, family-controlled and state-controlled firms are

T. T. He Á W. X. B. Li (&) Division of Business and Management, BNU-HKBU United International College, Zhuhai, Guangdong, China e-mail: wilsonli@uic.edu.hk T. T. He e-mail: heting@uic.edu.hk G. Y. N. Tang School of Business, Hong Kong Baptist University, Kowloon, Hong Kong e-mail: gyntang@hkbu.edu.hk

common in many economies around the world. Substantial literature in the disciplines such as business, economics, finance, law, and management documents features and characteristics of family and state ownership and the respective impacts of family or state...